TMW returns to tailored buy-to-let stress rates

The Mortgage Works is offering a more tailored approach to stress rates based on the product term and type.

This change means TMW will no longer apply the flat stress rate of 8.49% which it had brought in earlier this month during the period of turbulence in the markets.

Fixed rate product terms under five-years will now be calculated at pay rate + 2.00%.

Product terms of five years or more, as well as like-for-like remortgages, will be applied at pay rate + 1.50% for non-limited company landlords and pay rate + 0.50% for limited company borroewrs.

For tracker and variable rates, the stress rate will be applied at pay rate + 5.00% for non-limited company and pay rate + 4.00% for limited company, however TMW confirmed that it has temporarily withdrawn its buy-to-let tracker range and lifetime variable product.

Based on the current range, this means buy-to-let stress rates of between 6.64% and 8.79% depending on the product selected.

Daniel Clinton, head of The Mortgage Works, said: “Earlier this month we adopted an interim measure of applying a flat minimum stress rate for buy-to-let mortgages to better protect landlord cashflow during the period of interest rate turbulence. We have now reviewed our stress rates and we are moving to a more tailored approach based on the product type and term.”